Relating to the acquisition of water, sanitary sewer, and storm water utilities by rate-regulated public utilities

This bill relates to the acquisition of water, sanitary sewer, and storm water utilities by rate-regulated public utilities. The bill increases the threshold amount requiring utilities board (board) approval from $500,000 to $3 million when a public utility is acquiring a water, sanitary sewer, or storm water utility. The bill modifies city utility acquisition to include that the city must first certify completion of certain requirements, including an appraisal for the fair market value of the utility system, discussion of alternatives of the sale of the utility system, and a city council proposal for the sale. A certified completion shall include an affirmation that the city has complied timely and substantially to the acquisition. Current law requires that the city meets the requirements, but the city does not need to certify compliance. The bill provides that the rate base in the final order approving an acquisition shall include reasonable and customary closing costs, the cost of appraisals, and regulatory and legal expenses incurred in connection with the acquisition. The bill requires the public utility to submit a purchase agreement for the acquisition to the board to determine ratemaking principles. Purchase agreements must substantially comply with certain requirements. The bill provides that the board shall issue a final order within 120 days of the filing of an application for the acquisition of an at-risk utility system, or an order within 180 days for all other acquisitions. Current law provides that the board shall issue a final order within 120 days of filing the application for a utility that is an at-risk system.